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Nippon Steel Says Quarterly Profit Higher

Posted on: Monday, 31 October 2005, 06:00 CST

TOKYO - Japan's largest steel maker, Nippon Steel Corp., said Monday its profit jumped 80 percent in the quarter through September, boosted by growing sales and rising prices for steel sheets, used in automobile production.

Nippon Steel's profit for the quarter rose to 104.1 billion yen ($900 million), up from 57.7 billion yen the same period the previous year. Sales for the quarter jumped 19 percent to 958.6 billion yen ($8.3 billion) from 807.1 billion yen a year ago.

Nippon Steel lifted its forecast for this fiscal year ending March 2006 to 320 billion yen ($2.8 billion) from 310 billion ($2.7 billion), while keeping its sales outlook roughly unchanged at 3.87 trillion yen ($33 billion) from 3.88 trillion yen ($33.5 billion).

Demand for high-grade steel, Nippon Steel's specialty, remains strong, especially by Japanese manufacturers in China, a booming market for cars and other machinery, said spokesman Hiroshi Nakashima.

Steel prices have come down in lower grade steel, which are produced by Chinese steel companies, but prices are still high for upper grade steel sheets, lifting Nippon Steel's earnings, he said.

For the fiscal first half, Nippon Steel posted 195.7 billion yen ($1.7 billion) profit, more than double the 81 billion yen profit the manufacturer marked the same period a year ago. Fiscal half sales totaled 1.86 trillion yen ($16 billion), up 24 percent from 1.5 trillion yen the previous year.

Nippon Steel generates a large part of its profits from the high-grade steel sold to auto makers and shipbuilders. The Tokyo-based company has been successful in passing along the higher cost of raw materials to buyers. Only a small number of steel makers can supply high-grade steel products.

Nippon Steel expects the profitability of its high-grade steel business to continue to grow, more than offsetting the rising prices of raw materials and oil.

Nippon Steel shares, which have doubled in value from a year ago, closed Monday up about 0.5 percent at 413 yen ($3.60). Trading on the Tokyo Stock Exchange finished shortly before Nippon Steel announced earnings.

Source: Associated Press/AP Online

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